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LISI 2016 FINANCIAL REPORT
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2.2.17
I
Definition of the concepts “current”
and “non‑current” in the balance sheet
Assets and liabilities whose maturity is less than the operating cycle,
which is generally 12 months, are classified as current assets and
liabilities. If maturity is later than this, they are classified as non-
current assets and liabilities.
2.2.18
I
Overview of the income statement
The Group has opted to continue showing the following totals, which
are not strictly accounting ones, and whose definitions are as follows:
■■
Current Gross Operating Profit (EBITDA) includes added value,
administrative and sales expenses, costs of pensions and the cost
of remuneration in shares. It does not include contributions and
write-offs from depreciation and provisions.
■■
Current Operating Profit (EBIT) includes Current Gross Operating
Profit (EBITDA) as well as contributions and write-offs from
depreciation and provisions.
■■
Operating Profit includes EBIT, and other non-recurring operating
income and expenses. These non-recurring items are strictly
defined as income and expenses resulting from events or
transactions that are clearly distinct from the company’s ordinary
activities and that are not expected to reoccur on a regular basis,
owing to:
–
–
their unusual nature; and
–
–
their random occurrence, such as expenses or compensation
received for losses, costs resulting from shutdowns, restructurings,
or site relocations, goodwill amortization, and capital gains and
losses on the sale of non-operating, tangible and intangible assets.
2.2.18.1 Sale of goods and provision of services
Income from the sale of goods is recognized in the income statement
when the significant risks and advantages inherent in ownership of
the goods have been transferred to the buyer.
Sales revenues are shown after deduction of discounts. Sums from
royalties, patent fees and use of trademarks are posted to sales
revenues.
2.2.18.2 Payments for operating lease contracts
Payments for operating leases are recognized as expenses on a
straight-line basis over the period of the lease.
2.2.18.3 Payments for finance lease contracts
The minimum payments for finance leases, as described in
paragraph 2.2.8.2, are broken down into financial charges and debt
repayment. The financial charge is applied for each period covered
by the lease so as to have a constant, periodic interest rate to apply to
the declining balance.
2.2.18.4 Cost of finance and other financial charges and income
The cost of finance includes:
–
–
interest charges on loans calculated using the effective interest
rate method;
–
–
interest charges included in payments made for a finance lease and
calculated using the effective interest rate method;
–
–
interest income generated from current investments;
–
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variations in fair value of financial instruments;
–
–
income from dividends of non-consolidated companies is
recognized in the income statement when the Group becomes
entitled to receive payments, i.e., in the case of quoted securities,
on the coupon date.
Other financial income and expenses mainly include exchange profits
and losses.
2.2.18.5 Income taxes
Corporate income tax (debit or credit) includes the tax to pay (the tax
credit) in respect of each financial year and the amount of deferred
taxation to pay (credit). The tax is recognized as income, except if
it relates to items that are directly recognized as equity; in which case
it is recognized as equity.
Deferred taxation is calculated using the variable carry forward
method for all timing differences at year-end between taxable and
accounting values of assets and liabilities on the consolidated
balance sheet. Fiscally non-deductible goodwill does not give rise to
a declaration of deferred tax.
Deferred tax assets are only recognized if their recovery is probable.
Deferred tax debits and credits are measured at the tax rates that will
be applicable when the timing differences are settled.
The examination of the recoverability of brought forward losses is
subject to particular scrutiny and shall only be recoverable if the
subsidiary in question or its consolidation scope makes profits in the
near future.
Regarding French companies, pursuant to the removal of the
professional tax and its replacement by the CET and CVAE as of 2010,
the Group has decided to consider the CVAE in the context of the
IAS 12 standard. This decision will thus lead to the posting of this tax
as “Taxes” in the income statement.
The deferred taxes of French companies whose recoverability horizon
is more than three years were revalued, to take into account the article
in the Finance Act of 2017 on the gradual reduction in corporation tax.
2.2.18.6 Earnings per share
Net earnings per share (before dilution) are calculated on the ratio
between the net profit for the period and the weighted number of
shares in circulation during the period, after deduction of shares held
by the Group (treasury shares). Net diluted earnings per share are
calculated by including financial instruments that provide deferred
access to the Group’s capital (stock options, share warrants).
CONSOLIDATED FINANCIAL STATEMENTS
3